motion to strike jury demand and memorandum of … to strike jury demand and memorandum of law in...
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISION
HARD CANDY, LLC,
Plaintiff
v.
ANASTASIA BEVERLY HILLS, INC.,
Defendant
Civil Action No. 1:16-cv-21203-KMW
Motion to Strike Jury Demand and Memorandum of
Law in Support
Alan G. Greer
Florida Bar No. 123294
Mark A. Romance
Florida Bar No. 021520
Nathaniel M. Edenfield
Florida Bar No. 091034
RICHMAN GREER, P.A.
North Tower – 14th Floor
396 Alhambra Circle
Miami, FL 33134
(305) 373-4000
(305) 373-4099 (fax)
Louis T. Pirkey
(admitted pro hac vice)
Travis R. Wimberly
(admitted pro hac vice)
PIRKEY BARBER PLLC
600 Congress Ave., Suite
2120
Austin, TX 78701
(512) 322-5200
(512) 322-5201 (fax)
Counsel for Defendant Anastasia Beverly Hills, Inc.
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TABLE OF CONTENTS
Introduction ................................................................................................................... 1
Facts ............................................................................................................................... 1
Argument ....................................................................................................................... 3
I. There is no right to a jury under the Lanham Act. ........................................... 3
II. Plaintiff has no Seventh Amendment right to a jury in this case. ................... 3
A. Disgorgement of profits is an equitable remedy, not a legal
remedy. ..................................................................................................... 5
B. An injunction is an equitable remedy, not a legal remedy. .................... 8
C. The Court—not a jury—decides whether to award costs and
attorney fees. ............................................................................................ 8
III. A bench trial better fits this case. ...................................................................... 8
Conclusion .................................................................................................................... 10
Certificate of Compliance with Local Rule 7.1 ........................................................... 11
Certificate of Service .................................................................................................... 12
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INTRODUCTION
Plaintiff has no right to a jury in this case. Neither the Lanham Act nor the
Seventh Amendment give Plaintiff that right. Having withdrawn its claim for
damages a few weeks ago, ECF Nos. 50 & 51, Plaintiff’s remaining claims are
equitable—not legal—in nature. Equitable claims are tried to the Court, not to a jury.
The Court should strike Plaintiff’s jury demand.
FACTS
This is a lawsuit for trademark infringement and unfair competition. See
generally ECF No. 1 (“Complaint”). Both parties are in the cosmetics business.
Plaintiff’s allegations stem from a product formerly sold by Defendant Anastasia
Beverly Hills, Inc., called the “Gleam Glow Kit”:
Fig. 1: Gleam Glow Kit (front cover)
Fig. 2: Gleam Glow Kit (back cover)
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Fig. 3: Gleam Glow Kit (inside)
ECF No. 39-1 [D’s Depo. Exh. 17].
As these photos show, the Gleam Glow Kit contained four shades of makeup.
Anastasia named the four shades Hard Candy, Mimosa, Starburst, and Crushed
Pearl. Plaintiff alleges that one of these four shade names—Hard Candy—infringed
its trademark rights. Complaint ¶ 17. Plaintiff brings two claims under the federal
Lanham Act and two claims under state common law. Id. ¶¶ 24-51.
Initially, Plaintiff sought damages. But a few weeks ago, Plaintiff withdrew its
damages claim. ECF Nos. 50 & 51 (March 27 stipulation and order). With no claim
for damages, Plaintiff now seeks (1) disgorgement of Anastasia’s profits earned on
the Gleam Glow Kit; (2) the costs of the action; and (3) attorney fees. Id.; see 15 U.S.C.
§ 1117(a). Plaintiff also presumably seeks a permanent injunction (see Complaint p.
13 ¶ C), though as discussed below, that request is basically moot.
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ARGUMENT
For a civil litigant to demand a jury, it must have the right to one under either
a federal statute or the Seventh Amendment. See Fed. R. Civ. P. 38(a). If neither
source confers that right, the Court should strike any jury demand. See id. 39(a)(2).
Here, Plaintiff has demanded a jury, but it has no federal right to one. The
Lanham Act does not grant that right, and because Plaintiff withdrew its claim for
damages a few weeks ago, neither does the Seventh Amendment. The Court should
strike Plaintiff’s jury demand and try this case to the bench. See id.
I. There is no right to a jury under the Lanham Act.
The first question under Rule 38(a)—whether a federal statute gives Plaintiff
the right to a jury—requires little discussion. It is well-established that the Lanham
Act neither grants nor denies the right to a jury. The Act is “silent” on the issue. E.g.,
Sanijet Corp. v. Jacuzzi Inc., No. Civ. A 3:01CV0897-P, 2002 WL 1398546, at *1 (N.D.
Tex. Feb. 14, 2002). The question here thus turns on the Seventh Amendment.
II. Plaintiff has no Seventh Amendment right to a jury in this case.
The Seventh Amendment provides the right to a jury only “[i]n Suits at
common law.” U.S. Const. amend VII. This language reflects the historical distinction
between courts of law and courts of equity. See Parsons v. Bedford, Breedlove &
Robeson, 28 U.S. 433, 447 (1830). Only the former used juries. See id. Thus, the
Seventh Amendment gives the right to a jury only if the suit is legal in nature. Id. If
the suit is equitable in nature, the Seventh Amendment does not apply. Id.
Crucially, even claims brought under a federal statute—like the Lanham Act
here—can be equitable in nature. See, e.g., Chauffeurs, Teamsters & Helpers, Local
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No. 391 v. Terry, 494 U.S. 558, 564-65 (1990) (citing Tull v. United States, 481 U.S.
412, 417 (1987)). To determine whether a federal statutory claim is equitable or legal,
the Supreme Court conducts a two-pronged analysis. Id. at 565 (citing Tull, 481 U.S.
at 417-18). First, the Court compares the statutory action to the 18th-century actions
brought in courts of England, to see whether similar actions would have been filed in
the courts of law or the courts of equity. Id. Second, the Court examines the remedies
sought to see whether they are essentially legal or equitable. Id. The second prong is
“more important.” Id.
Here, both prongs lead to the same result. First, before the law-equity merger,
“most trademark actions were brought in equity.” Mark A. Thurmon, Ending the
Seventh Amendment Confusion: A Critical Analysis of the Right to a Jury Trial in
Trademark Cases, 11 Tex. Intell. Prop. L.J. 1, 85 (2002); see also id. at 63-68. This
means most trademark cases “were tried without a jury.” Id. at 85. This was
particularly true where—as here—the plaintiff sought primarily a disgorgement of
the defendant’s profits. See id.
Second, Plaintiff seeks no legal remedy here. The main legal remedy available
in trademark lawsuits—actual damages—exited this case when Plaintiff withdrew
its damages claim on March 27. ECF Nos. 50 & 51.1 The March 27 stipulation
identifies the monetary remedies Plaintiff still seeks: disgorgement of Anastasia’s
1 “[T]he issues, not the pleadings, determine whether a right to a jury trial
exists.” FN Herstal SA v. Clyde Armor Inc., 838 F.3d 1071, 1089 (11th Cir. 2016).
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profits, costs, and attorney fees. Id. Plaintiff also presumably still seeks a permanent
injunction. None of these remedies are legal ones for a jury.
A. Disgorgement of profits is an equitable remedy, not a legal
remedy.
An award of money is not always a legal remedy. See Terry, 494 U.S. at 570
(citing Curtis v. Loether, 415 U.S. 189, 196 (1974)). This case provides a perfect
example. Disgorgement of the defendant’s profits—the principal relief Plaintiff
seeks—is an equitable remedy, not a legal one. The Supreme Court has said so time
and time again. E.g., Terry, 494 U.S. at 570; Tull, 481 U.S. at 424; Porter v. Warner
Holding Co., 328 U.S. 395, 398-99 (1946). So has the Eleventh Circuit. E.g., Waldrop
v. S. Co. Servs., Inc., 24 F.3d 152, 153 (11th Cir. 1994). And this Court has too—in
trademark cases, no less. E.g., Mycoskie, LLC v. 2013toms.com, No. 14-61551-CIV,
2014 WL 12531313, at *4 (S.D. Fla. July 22, 2014); Playboy Enters., Inc. v. P.K. Sorren
Export Co., 546 F. Supp. 987, 997 (S.D. Fla. 1982).
These decisions should end the analysis. When a trademark plaintiff seeks only
equitable relief, courts (including this Court) have consistently ordered bench trials.2
2 E.g., Fifty-Six Hope Road Music, Ltd. v. A.V.E.L.A., Inc., 778 F.3d 1059, 1074-
75 (9th Cir. 2015); Ferrari S.P.A. v. Roberts, 944 F.2d 1235, 1248 (6th Cir. 1991);
Order Granting Mot. to Strike Jury Demand, ECF No. 160, Ass Armor, LLC v. Under
Armour, Inc., No. 15-Civ-20853 (S.D. Fla. Nov. 18, 2016) (order attached as Exhibit
1); Monster Daddy, LLC v. Monster Cable Prods., No. 6:10-1170-MGL, 2013 WL
3337828, at *17 (D.S.C. July 2, 2013); Empresa Cubana Del Tabaco v. Culbro Corp.,
123 F. Supp. 2d 203, 206-09 (S.D.N.Y. 2000); Ringling Bros. v. Utah Div. of Travel
Dev., 955 F. Supp. 598, 605 (E.D. Va. 1997); G.A. Modefine S.A. v. Burlington Coat
Factory Warehouse, 888 F. Supp. 44, 45-46 (S.D.N.Y. 1995); Partecipazioni Bulgari,
S.p.A. v. Meige, No. 86-2516-CIV, 1988 WL 113346, at *3-4 (S.D. Fla. May 23, 1988);
Am. Cyanamid Co. v. Sterling Drug, Inc., 649 F. Supp. 784, 788-89 (D.N.J. 1986).
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Many of these trademark decisions have made quite explicit that a claim for
disgorgement of profits does not trigger the Seventh Amendment:
• “There is no Seventh Amendment right to have a jury calculate
profits.” Fifty-Six, 778 F.3d at 1074.
• “[T]he disgorgement of defendant’s profits . . . [is] wholly equitable
and do[es] not create a constitutional jury trial right.” Ringling Bros.,
955 F. Supp. at 605.
• “The crux of the issue presented here is whether or not a claim for
disgorgement of profits in a trademark case constitutes a claim for
damages entitling the defendant to a jury trial. . . . [The defendant]
is not entitled to a jury trial and its demand is hereby stricken.”
Empresa, 123 F. Supp. 2d at 206, 213.
• “[I]n the trademark infringement context, the remedy of
disgorgement of profits is equitable in nature.” G.A. Modefine, 888 F.
Supp. at 45 (denying request for jury trial).
• “Ferrari’s complaint requested only equitable relief[:] an injunction
and disgorgement of profits.” Ferrari S.P.A., 944 F.2d at 1248
(affirming denial of jury trial).
• “The relief admittedly sought . . . is equitable in nature or otherwise
in the province of the court—primarily the recovery of Monster
Daddy’s profits (under the Lanham Act) and attorney’s fees as a
prevailing party.” Monster Daddy, 2013 WL 3337828, at *17 (striking
jury demand).
In the interest of candor, Anastasia notes that a “small minority” of older
district court decisions—none from this Court—reached a different result.3 6 J.
Thomas McCarthy, McCarthy on Trademarks & Unfair Competition § 32:124 (4th ed.
2014) (treatise excerpts attached as Exhibit 2). But those outlier decisions do not
change the result here.
3 E.g., Oxford Indus, Inc. v. Hartmarx Corp., 15 U.S.P.Q. 2d, 1990 WL 65792
(N.D. Ill. 1990); AMF Inc. v. Nat’l Boat Works, Inc., 192 U.S.P.Q. 81, 1975 WL 21202
(M.D.N.C. 1975).
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First, they are wrong. As higher courts and influential commentators have
explained, the minority decisions rest on an incorrect reading of Dairy Queen, Inc. v.
Wood, 369 U.S. 469 (1962). See, e.g., McCarthy, supra, § 32:124. In Dairy Queen, the
Supreme Court held that a licensee was entitled to a jury trial on legal claims. 369
U.S. at 478-80. The minority decisions misread Dairy Queen as involving a claim for
disgorgement of profits, when actually it involved two indisputably legal remedies:
damages for breach of contract, and damages (not disgorgement of profits) for
trademark infringement. See id. at 476-77. Many courts have observed the correct
reading of Dairy Queen, including the Eleventh Circuit. E.g., Fifty-Six, 778 F.3d at
1075; Gucci Am., Inc. v. Li, 768 F.3d 122, 132-33 (2d Cir. 2014); Phillips v. Kaplus,
764 F.2d 807, 814 (11th Cir. 1985).
Second, the minority decisions are not binding. Neither this Court nor the
Eleventh Circuit has held that disgorgement of profits is a legal remedy triggering
the right to a jury. As just noted, the Eleventh Circuit has rejected that interpretation
of Dairy Queen. See Phillips, 764 F.2d at 814 (affirming this Court’s denial of a jury
trial and explaining that, unlike the equitable remedy of a profits accounting, Dairy
Queen involved what was “really a legal claim for breach of contract”). The binding
law is unmistakable: disgorgement of profits is an equitable remedy. See supra p. 5.
Finally, the minority decisions are stale. More recent decisions have taken the
majority view. See supra p. 5 n.2. This makes sense. In the decades since Dairy Queen,
the Supreme Court has repeatedly said that disgorgement of profits is an equitable
remedy, not a legal one. E.g., Terry, 494 U.S. at 570; Tull, 481 U.S. at 424.
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B. An injunction is an equitable remedy, not a legal remedy.
Although not mentioned in Plaintiff’s March 27 stipulation (ECF No. 50),
Plaintiff will presumably seek a permanent injunction if it wins at trial. This is the
“usual” remedy (and often, the only remedy) for a plaintiff in a trademark case.
5 McCarthy, supra, § 30:1.
An injunction in this case would basically be moot. Anastasia stopped selling
the Gleam Glow Kit over half a year ago, and it will not sell the kit again. Also, while
Anastasia does not agree that it infringed Plaintiff’s rights, Anastasia will not use
the words Hard Candy again (and has confirmed this to Plaintiff’s counsel on the
record). But regardless, “[i]njunctive relief is an equitable remedy.” Grayson v. Allen,
491 F.3d 1318, 1322 (11th Cir. 2007). “[T]here is no constitutional right to a jury trial
on a claim for an injunction.” 9 Charles A. Wright & Arthur R. Miller, Federal Practice
& Procedure § 2308 (3d ed. 2008).
C. The Court—not a jury—decides whether to award costs and
attorney fees.
If Plaintiff wins at trial, it intends to seek costs and attorney fees. ECF No. 50.
Neither issue goes to a jury. They are issues for the Court to decide after trial (and
only if Plaintiff wins, which Anastasia believes is unlikely). See, e.g., CBS Broad., Inc.
v. EchoStar Commc’ns Corp., 450 F.3d 505, 518 n.25 (11th Cir. 2006); Partecipazioni
Bulgari, 1988 WL 113346, at *3.
III. A bench trial better fits this case.
Because Plaintiff has no federal right to a jury, its jury demand is improper.
The Court’s analysis can end there. See Fed. R. Civ. P. 38(a), 39(a)(2).
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However, the Court may also wish to consider the practical benefits of a bench
trial. All the usual benefits apply: the trial will be shorter and more efficient,
members of the community will not have to sacrifice time and money to serve on a
jury, and the parties will both probably end up saving money (and time) in trial costs
and attorney fees.
A bench trial will also reduce the Court’s pretrial workload. For example, some
of the parties’ Daubert arguments will become moot,4 the Court will not need to
review and approve proposed jury instructions, and it will not need to decide any
motions in limine. See, e.g., Singh v. Caribbean Airlines Ltd., No. 13-20639-CIV, 2014
WL 4101544, at *1 (S.D. Fla. Jan. 28, 2014) (“[T]his is a bench trial, making any
motion in limine asinine on its face.” (quotation omitted)).
Likewise, a bench trial will better promote judicial economy. Plaintiff seeks no
remedy that a jury alone could award. See supra Part II. Even if this case were tried
to a jury (and even if Plaintiff won the trial), the Court would still need to
independently decide whether to award any of Anastasia’s profits—and how much, if
so. See 15 U.S.C. § 1117(a) (profits awards are “subject to principles of equity,”
“assessed” by the Court or under the Court’s direction, and subject to the Court’s
authority to “enter judgment for such sum as the court shall find to be just, according
4 Both parties have moved to exclude an opposing expert witness. ECF Nos. 44
& 45. These Daubert cross-motions argue, among other things, that the two experts’
testimony will confuse and mislead the jury under Federal Rule of Evidence 403. ECF
No. 44 at 12; ECF No. 45 at 19-20. If the Court grants this motion to strike the jury
demand, Anastasia will withdraw as moot its Rule 403 argument against Plaintiff’s
expert (though the Court should still exclude him for all the other reasons outlined
in Anastasia’s Daubert motion, ECF No. 45 at 1-18).
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to the circumstances of the case”); see also ECF No. 64 at 1 (Plaintiff’s concession that
the Court has final say on awarding profits).
A bench trial eliminates this inefficiency. The Court can decide all the issues
in one fell swoop. If it finds for Plaintiff on liability, it can decide at the same time
whether to award any of Anastasia’s profits. This authority has always belonged to
the courts (not to juries), long before the Lanham Act codified it:
[The trademark law] does not stand for the proposition that an
accounting [of profits] will be ordered merely because there has been an
infringement. Under the Trade Mark Act of 1905, as under its
predecessors, an accounting has been denied where an injunction will
satisfy the equities of the case.
Champion Spark Plug Co v. Sanders, 331 U.S. 125, 131 (1947) (affirming district
court’s and court of appeals’ decisions not to award profits).
Judges “regularly” handle profits determinations in trademark cases. Fifty-
Six, 778 F.3d at 1075-76. Juries traditionally do not. Id. “[T]he determination of
profits under § 1117 is not ‘fundamental . . . inherent in and of the essence of the
system of trial by jury.’” Id. (quoting Tull, 481 U.S. at 426). So too here.
CONCLUSION
Plaintiff has no right to a jury trial. The Court should strike Plaintiff’s jury
demand and try this case to the bench.
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CERTIFICATE OF COMPLIANCE WITH LOCAL RULE 7.1
Under L.R. 7.1, Defendant’s counsel conferred with Plaintiff’s counsel in a
good-faith effort to resolve the issues raised in this motion. The parties have not been
able to resolve the issues, and Plaintiff has not consented to the relief sought.
DATED: April 19, 2017
s/ Mark A. Romance
Alan G. Greer
Florida Bar No. 123294
Mark A. Romance
Florida Bar No. 021520
Nathaniel M. Edenfield
Florida Bar No. 091034
RICHMAN GREER, P.A.
North Tower – 14th Floor
396 Alhambra Circle
Miami, FL 33134
(305) 373-4000
(305) 373-4099 (fax)
Respectfully submitted,
s/ Travis R. Wimberly
Louis T. Pirkey (admitted pro hac vice)
Travis R. Wimberly (admitted pro hac
vice)
PIRKEY BARBER PLLC
600 Congress Ave., Suite 2120
Austin, TX 78701
(512) 322-5200
(512) 322-5201 (fax)
Counsel for Defendant Anastasia Beverly Hills, Inc.
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CERTIFICATE OF SERVICE
I hereby certify that on April 19, 2017 a true and correct copy of the foregoing
document was electronically filed with the Clerk using the CM/ECF filing system and
served upon on all counsel of record or pro se parties below, either via transmission
of Notices of Electronic Filing generated by the CM/ECF filing system or in some
other authorized manner for those counsel or parties who are not authorized to
receive electronically Notices of Electronic Filing:
Kevin Kaplan
Gabriel Groisman
COFFEY BURLINGTON, P.L.
2601 South Bayshore Drive, Penthouse 1
Miami, Florida 33133
Tel: 305-858-2900
Fax: 305-858-5261
Counsel for Plaintiff Hard Candy, LLC
s/ Mark A. Romance
Mark A. Romance
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA
CASE NO. 15-Civ-20853-COOKE/TORRES
ASS ARMOR, LLC, et al., Plaintiffs, v. UNDER ARMOUR, INC., Defendant. ______________________________________/
ORDER ON DEFENDANT’S MOTION TO STRIKE JURY DEMAND
This matter is before the Court on Defendant’s Motion to Strike Jury
Demand [D.E. 140]. After careful consideration of the motion, response, reply, sur-
response, and relevant authority, and for the reasons discussed below, Defendant’s
Motion to Strike Jury Demand is GRANTED.
I. ANALYSIS
On September 13, 2016, Under Armour, Inc. (“Defendant”) filed a Motion to
Strike Jury Demand against Ass Armor, LLC, et al. (“Plaintiffs”). Because
Defendant recently dropped its claim for monetary damages1 on September 7, 2016
to streamline trial, Defendant argues that only equitable claims remain and that
there is no right to a jury trial. In Plaintiffs’ sur-response, Plaintiffs concede that
1 Defendant’s counterclaim initially sought both equitable relief – an injunction and disgorgement of Plaintiffs’ profits – and monetary damages. [D.E. 39].
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“there is no statutory or constitutional right to a jury” because both parties only
seek equitable relief on their claims. [D.E. 149]. But, Plaintiffs urge the Court to
proceed with a jury trial because Plaintiffs will suffer prejudice by Defendant’s
continued gamesmanship. Since this litigation began, Plaintiffs contend that they
have always prepared for a jury trial and that Defendant’s sudden decision to drop
its damage claim is too prejudicial.
On September 28, 2016, the Court required Plaintiffs to file a sur-response to
address why the Eleventh Circuit’s decision in FN Herstal SA v. Clyde Armory Inc.,
838 F.3d 1071 (11th Cir. 2016) “does not strongly support the grant of this motion to
strike jury demand.” [D.E. 147]. In FN Herstal SA v. Clyde Armory Inc., both
parties initially demanded a jury trial but their damage claims were later dropped –
leaving both parties with only claims for equitable relief. The district court
subsequently granted plaintiff’s motion to strike the jury demand. The Eleventh
Circuit affirmed the district court’s decision and reasoned:
When no right to a jury trial exists and where no prejudice will result, a party may unilaterally withdraw its consent to a jury trial. We are . . . persuaded by the Fifth Circuit’s discussion in Armco, in which the defendant demanded a jury trial based on the plaintiff's claims for legal relief—trademark infringement damages. 693 F.2d at 1158. The plaintiff moved to strike the defendant’s jury demand “[o]n the eve of trial” because the plaintiff no longer sought legal relief. Id. . . . This Court has affirmed a district court’s striking a jury demand “days before trial” without any consideration of prejudice because no right to a jury existed where only equitable relief was sought. See CBS Broad., Inc., 450 F.3d at 517 n.25. The district court correctly granted FN’s motion to strike the jury demands.
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FN Herstal SA, 838 F.3d at 1089-90.
Here, Plaintiff attempts to distinguish FN Herstal SA on the basis that the
Eleventh Circuit found that “no prejudice will result”. Id. at 1089 (emphasis added).
This case is allegedly distinguishable because Plaintiffs here have been prejudiced
by Defendant’s continued gamesmanship during the pendency of this entire
litigation and will continue to be prejudiced if this case proceeds to a bench trial.
Plaintiffs refer the Court to many reasons why prejudice may result – ranging from
discovery costs in excess of $60,000 to unnecessary expert reports. But, Plaintiffs’
entire argument is premised on speculation that Defendant is attempting to “make
this litigation as expensive as possible.” [D.E. 149]. Plaintiffs present no concrete
argument to substantiate its claim that prejudice will result with a bench trial.
And the timing of Defendant’s motion is no bar because the Eleventh Circuit has
previously affirmed district courts striking jury demands “days before trial.” CBS
Broad., Inc. v. EchoStar Commc’ns Corp., 450 F.3d 505, 517 (11th Cir. 2006).
II. CONCLUSION
For the foregoing reasons, it is hereby ORDERED AND ADJUDGED that
Defendant’s Motion to Strike Jury Demand [D.E. 140] is GRANTED.
DONE AND ORDERED in Chambers at Miami, Florida, this 18th day of
November, 2016.
/s/ Edwin G. Torres EDWIN G. TORRES United States Magistrate Judge
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